How to Insulate Your Hot Water Heater

If a water heater is warm to the touch, it is wasting power. A homeowner's simplest solution is to add a fiberglass insulation blanket. Fitting a blanket to an electric heater is straightforward—just cut holes for the heating elements.

If a water heater is warm to the touch, it is wasting power. A homeowner's simplest solution is to add a fiberglass insulation blanket. Fitting a blanket to an electric heater is straightforward -- just cut holes for the heating elements. With gas heaters, be careful not to block airflow to the burner. The pipes also can be insulated with sleeves, particularly within 3 ft. of the storage tank. Insulation costs only $30 or so, yet it can cut as much as 10 percent off your monthly bill.

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Heat loss also occurs through the convective flow of hot water into the pipes. Stop the flow with heat traps -- one-way valves or loops of flexible pipe. They cost about $30, and typically pay for themselves in one to two years.